The sordid saga of Airbnb -- a $10 billion "outlaw middleman" -- continues

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SF-based Airbnb is making news again this week, from the San Francisco Chronicle following up our stories about how landlords are sending eviction notices to tenants who are breaking their leases and local laws in using the short-term rental services to national outlets trumpeting Airbnb’s estimated $10 billion in valuation, which is more than some of the biggest hotel chains.

But nobody seems to be calling out how those two things are connected, except perhaps in ValleyWag’s passing but spot-on reference to the SF-based company as an “outlaw middleman.” That’s a good label for a scofflaw company that is making buckets of money by openly flouting tenant and tax laws in San Francisco, New York City, and other cities around the world.

Meanwhile, as the City Attorney’s Office continues preparing to take legal action against Airbnb, new companies are popping up to make it even easier for residents to illegally monetize their rent-controlled apartments, such as AirEnvy.com, which encourage people to “profit from your home or apartment by renting out unused space through a full service management marketplace.”

The company charges people 18 percent to manage their Airbnb rentals, checking guests in and out, cleaning up, and whatnot. And most of its testimonials are from San Franciscans, such as Rob, who writes, “I used to spend hours managing my Airbnb, exchanging keys with guests, and cleaning. Now, Airenvy does all that for me.”

Breaking local laws against short-term rentals has never been easier! All this infuriates Janan New of the San Francisco Apartment Association, who tells the Guardian that more than 1,100 rent-control apartments are listed on Airbnb at any time, and she’s been working with landlords to identify and evict such tenants.

Yet she denies that many landlords are using Airbnb to get around rent-control laws -- such short-term rentals are also usually illegal, even for owners -- and told us, “If people are breaking the law on our side, I want to know who it is.”

And as this highly lucrative clusterfuck continues, Board of Supervisors President David Chiu is still mired in his year-long efforts to create a legislative remedy for all of this. But Airbnb seems to be taking its local political problems seriously, this week hiring David Owen -- a well-connected former legislative aide to Chiu’s predecessor, Aaron Peskin -- away from Platinum Advisors to work on public policy for the company.

Stay tuned, folks, there’s lots more to come on an issue that the Guardian started covering years ago when few were paying attention to how an illegal business model was being used to create a multi-billion-dollar company.   

Comments

Although one probably best not made in Asia.

Posted by Guest on Mar. 24, 2014 @ 3:42 pm

Airbnb thinks it can shower enough money on politicians (they are in full force in Albany, NY using PR firms like Bolton St.Johns) and rewrite laws to make illegal activity legal. there is a reason the activity was deemed illegal in the first place. Berlin chose to crack down on illegal hotels after finding their affordable housing stock was being vaporized by sites like Airbnb. It won't be long before there will be no one available to clean the apartments being listed on Airbnb

Posted by Guest on Mar. 21, 2014 @ 8:01 am

That doesnt give SF any special rights to legislate or tax it.

I don't give a crap about Berlin but there is nothing illegal about doing AirBnB lets unless you are a tenant.

As an owner of units, I have done many short-term lets and there are no legal issues

Posted by Guest on Mar. 21, 2014 @ 8:09 am

There is no particular reason, other than protecting the profits of existing hotels/B&Bs, that ordinary homeowners shouldn't be able to occasionally rent out a room in their home that they would otherwise leave vacant for a weekend.

What some progressives of SF just can't seem to accept is that the triumph of AirBNB/Uber/Lyft/etc. aren't just the product of flaunting laws or throwing consumer protections out the window. In fact, they often demonstrate a failure of the existing regulatory structure in certain industries to adequately fulfill the public demand. The laws _will_ be rewritten to accommodate these sorts of services, even if a little basic regulation ends up being imposed.

Posted by Guest on Mar. 21, 2014 @ 1:12 pm

clearly you drank the poision. What a crock...
There are local laws and taxes regarding hotelization- and homeowners and the online brokers will be held accountable. Only stock salesmen and buyers are invested in how 'special' AirBnB is.

Posted by Guest on Mar. 27, 2014 @ 7:24 pm
Posted by Guest on Mar. 27, 2014 @ 7:57 pm

Businesses are subject to taxes and regulations. The 14% Occupancy Tax does not exist to protect the hospitality industry. It pays for the celebrated infrastructure visitors come to see and use.

Posted by Guest on Mar. 28, 2014 @ 10:16 am

us when we go out together. That's no difference.

Maybe I should provide the room for free and charge $100 for a "convenience fee".

Posted by Guest on Mar. 28, 2014 @ 10:30 am
Posted by Guest on Mar. 28, 2014 @ 3:41 pm

a paid stay in your home. My points are that:

1) I doubt that that can be collected from any intermediary unless that intermediary has a physical and elgal presence in your jurisdiction

2) Collecting such a tax from the host would be a very difficult and complciated and invasive process, and may cost as much as the revenue collected

3) The claims that it is somehow "illegal" to rent your home for a few days here and there is false.

4) If I occasionally rent out a room overnight, that would not be called a "business" in most places. no incorporation is required, nor is any license needed. Income tax is probably due, although I suspect much of it is not declared and would be hard to discover

Posted by Guest on Mar. 28, 2014 @ 4:07 pm

And then we fleece them because they don;t get a vote here.

We'd make more money if we made it cheaper for tourists to go here - they will just spend the tax saved on other stuff here anyway.

win-win.

Anyway, Airbnb hosts do not pay the hotel tax, mostly because they think it should only apply to hotels

Posted by Guest on Mar. 28, 2014 @ 10:32 am

Translation: "The profits of the established hospitality industry must be protected against the desires of the general population."

Posted by Guest on Mar. 27, 2014 @ 8:07 pm

disempowered the bureaucracies

We love it

Posted by Guest on Mar. 27, 2014 @ 8:13 pm

But evictions are bad! The greedy landlords shouldn't be allowed to evict the proletariat renters!

Posted by Guest on Mar. 21, 2014 @ 8:13 am

is usually that the property owner doesn't wish to have that tenant any longer, and in many cases does not want to be in the long-term rental business at all.

So the usual choice is either to switch to short-term lets or go the TIC/condo route.

I've done both and, at this point, I only do new long-term rentals for units that do not fall under rent control. A classic example of over-regulation killing an entire business sector.

Tenants should be angry that rent control has caused this, and turn their venom onto tenant activists and not on property owners.

Posted by Guest on Mar. 21, 2014 @ 8:28 am

No more long-term tenants for me either. I am sick dealing with their bullshit. I bought out my final dependent loser tenant and now I am free!

AirBnB is too much trouble, though, I prefer 3-6 month corporate lets. They should create a website that just serves that segment.

Posted by Guest on Mar. 21, 2014 @ 11:40 am

It doesn't take much effort to find long-stay tourists, academics on visiting assignments or corporate lets like you say. In fact some tech companies like google will rent from you directly and pay you directly.

Foreign short-term tenants in particular are perfect.

I don't know why any LL would bother with a long-term tenant unless they are stuck with them.

Posted by Guest on Mar. 21, 2014 @ 11:52 am

Thanks to the SFBG, I now realize that Airbnb is an evil company, controlled by Ed Lee, the Koch brothers, and Satan.

Thanks, SFBG!

Posted by racer さ on Mar. 21, 2014 @ 1:03 pm

a middleman you made big money off of Steve stop lying about it

you're a hypocrite of the worst kind. please go back to hickville and stop ruining what's left of this shit paper of yours. the one you stole from Bruce and Tim and whom you disrespect over and over again.

does sucking off a corporate dick taste that good? I mean, seriously, only Marc Salomon sucks cock off a rich person like that better, and at least he gets benefits, but you? you're really a sellout. hope that corporate cum tastes better than whatever it is your spouse spilled out of her vag, you loser.

Posted by Guest on Mar. 22, 2014 @ 8:24 pm

Before 9pm?

Posted by Guest on Mar. 22, 2014 @ 8:37 pm

the dick sucking thing?

Its really weird if you are trying to do that progressive thing. A progressive worried abut who dick is sucked and by whom?

Extremist politics attracts real nut cases.

Posted by Guest on Mar. 22, 2014 @ 10:16 pm

Jones has been lying for years about bikes, Burning Man, and now AirBnB. Isn't it time to be hired by sfgate yet?

Posted by Guest on Mar. 24, 2014 @ 9:59 am

Like George III, Steven tells falsehoods so many times that eventually be believes them himself, even when the facts blatantly contradict him.

So he endlessly claims that, for instance, homeowners are not allowed to have a paying guest in their homes for a few days here and there, just because that suits his prejudice against AirBnB, which is really just his prejudice against Ed Lee.

Occasionally, when Steven is confronted with the facts, he will respond and try to defend his position. But most of the time he has no answer and ducks, doping that his critics will just shrivel up and go away.

Not working, STJ. Not even close.

Posted by Guest on Mar. 24, 2014 @ 10:40 am

against progress, popularity, success and prosperity.

Posted by Guest on Mar. 24, 2014 @ 10:59 am

Can you cited any of my alleged lies, or is it you who's lying?

Posted by steven on Mar. 25, 2014 @ 11:12 am

that I cannot have a guest in my home on a short-term basis and I am not allowed to accept money from them.

Posted by Guest on Mar. 28, 2014 @ 4:03 pm

Isn't AirBnB planning their IPO this year? Imagine all the new millionaires looking to BUY homes in San Francisco.

Posted by Guest on Mar. 25, 2014 @ 9:56 am

because your companies want a "shared city"

and use the money to assist displaced workers from the industries you 'disrupted'.

Posted by Guest on Mar. 27, 2014 @ 5:56 am

Losers fail for good reasons.

Posted by Guest on Mar. 27, 2014 @ 6:14 am

ask Leland Yee and Shrimp Boy Chow

Posted by Guest on Mar. 27, 2014 @ 9:50 am
Posted by Guest on Mar. 27, 2014 @ 10:00 am

my inbox with the Shared City was a real eye opener...AirBnB is a fine company that wants to evade taxes and local laws and has enough money to buy a lot of good will to protect their income- they are cheating the system- and calling it disruption-it is an age old game-

Posted by Guest on Mar. 27, 2014 @ 10:12 am

Steven keeps claiming that but cannot back it up with a cite.

And the tax issues are being resolved - it's not clear that any tax is owed.

Posted by Guest on Mar. 27, 2014 @ 10:36 am
Posted by Guest on Mar. 27, 2014 @ 11:02 am

If it were possible to effectively regulate it, that would happen. The whole point of this business model is that it's not located in a jurisdiction, which is why regulations must target the host and not the intermediary.

SF is trying but Airbnb just happens to be located in SF. What if they were in Switzerland?

Of course, any city can ban short-term rentals but it is near impossible to enforce. And even that assumes the courts would uphold a city's rules as constitutional

Posted by Guest on Mar. 27, 2014 @ 11:14 am

when I look at their site?

It's administratively and politically impossible to police a law that restricts what a person can do in his own home.

Posted by Guest on Mar. 28, 2014 @ 7:12 am

Airbnb can do what Orbitz is doing and collect the tax on their services as they collect their broker fee. It will be paid by the users- either the lessees or the lessors, no skin off Airbnb's nose....
I agree, it is being worked out and I hope Airbnb does the right thing and shares with the local civic infrastructure that supports it.

Posted by Guest on Mar. 27, 2014 @ 11:09 am

Airbnb happens to be in SF so SF can pass a law that regulates them. But what if Airbnb were in another state or nation? How could SF regulate them then?

See, this is the problem with "old style" regulation. It assumes a physical presence. But an internet business doesn't have to " be" anywhere specific. And it can certainly be somewhere that is not subject to US laws.

Look at the US attempts to control internet poker, which is illegal in the US but legal in most other places. Total fail.

I think that either SF will have to compromise with Airbnb or Airbnb will simply give SF the finger and move somewhere where SF can't touch them.

Posted by Guest on Mar. 27, 2014 @ 11:24 am

global business is laughable.

There is no there there with the sharing economy. And old school leftists are mad.

Posted by Guest on Mar. 27, 2014 @ 11:42 am

How do you regulate or tax a website in Mauritius that arranges for a Latvian tourist to stay in SF for a week with the payment going through a Swiss bank?

Answer. You cannot. All you can do is go after the SF host because that is the only person or entity in your jurisdiction.

Posted by Guest on Mar. 27, 2014 @ 8:16 pm

Locate the company, and the employees on the moon, it will not matter- as in the Orbitz case - you collect tax due on the transaction and remit it to the taxing authority.

Posted by Guest on Mar. 27, 2014 @ 2:39 pm

your jurisdiction. So if Airbnb was in Switzerland, SF could certainly claim a tax but they could not enforce collection because a Swiss court would say no.

Which leaves SF doing what it should be doing in the first place and going after the host, because the host IS in SF and can be taxed.

Orbitz might have had its own reason for allowing that but they are not a sharing economy enterprise.

Posted by Guest on Mar. 27, 2014 @ 3:11 pm

somehow being exempt from local taxes and regulation will be dealt with. It is semantics used to keep from collecting taxes at the point of sale - and these companies have enough juice to make some local policy makers see it their way- for the moment.

Posted by Guest on Mar. 27, 2014 @ 5:17 pm

entity in Russia or China?

You cannot regulate an entity that has no physical presence anywhere where you have power and jurisdiction

The big government mob is desperate to control the internet but they cannot. and that is what is beautiful about it and the sharing economy

Posted by Guest on Mar. 27, 2014 @ 8:11 pm

economy because they have no idea how to manage something they cannot see, hear or locate.

A new paradigm is needed but the mindless bureaucrats have no clue how to tap into this zeitgeist.

Posted by Guest on Mar. 27, 2014 @ 8:26 pm
Posted by Guest on Mar. 27, 2014 @ 8:13 pm

Find you apt on AirBnB - get a friend or relative (from another city) to rent for a week and then have them refuse to leave.
Use all the tenants rights given by the city of SF
The master tenant/landlord will either have to hire a landlord attorney to evict the subletter or just stop paying rent.
If the Master hires an attorney the 90 process will allow the REAL landlord to evict for an illegal sublet.
If the tenant just stops paying rent the REAL landlord will file a proper eviction notice for non-payment of rent.
Either way a rent controlled apartment will be liberated from the scum sucking profiteering subletter!

Posted by Guest on Mar. 27, 2014 @ 10:46 am

an "activist" could book an Airbnb home for one night, refuse to leave and claim tenant's rights.

Turn this around and a LL can use the same scheme to evict a tenant, and the beauty of it is that that tenant would already be gone from the unit.

Posted by Guest on Mar. 27, 2014 @ 10:57 am

perfect way to generate more ill will toward entitled people who feel they are owed something for nothing

Posted by Guest on Mar. 27, 2014 @ 11:11 am

I just want my tenant gone.

Posted by Guest on Mar. 27, 2014 @ 11:21 am

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